April 8, 2020 8:40am

Volatility is the story of session life these days

Pre-open indications: Skim if you can trim, buy if it will fly and sell if compelled!

News: Sage Therapeutics (SAGE) clouds the sector’s vision  https://www.regmedinvestors.com/articles/11305

Framing the main takeaway … pricing, volume and machine trading creates volatility and liquidity!  

Dow future are UP +1.28% (+287 points), S&P futures are UP +1.29% (+34 points) and NASDAQ futures are UP +1.30% (+104 points)

 

U.S. stock futures are fluctuating to slight gains on Wednesday;

European markets traded lower as optimism over as recovery from the coronavirus fades with the pan-European Stoxx 600 falling -1% in early trade;

Asia Pacific markets were mixed as Japanese Prime Minister Abe declared Tuesday a state of emergency yet, the Nikkei 225 rose 2.13%, Mainland Chinese stocks, South Korea and Australia declined along with the MSCI Asia ex-Japan index -0.79%.

 

Data docket: Mortgage applications feel -19% but were 144% higher than a year ago. as rates are not holding causing a pullback. Mortgage applications to purchase a home continued their sharp decline, falling 12% for the week and 33% year to year.

  • Another confidence losing factor.

The Federal Open Market Committee publishes its meeting minutes from its March meeting. 

 

Henry’omics:

Volatility seems to be always with us and likely to remain for some time as risk to the downside is greater than the opportunity to the upside.

More economic misery is also on the horizon.

  • Economists expect a report on Thursday to show that 5 million Americans applied for unemployment benefits last week as layoffs sweep the country. That would bring the total to nearly 15 million over the past three weeks.

On a lighter side, the holiday is a quirky one for financial markets in the U.S. because Good Friday isn’t a federal holiday. In fact, it is among the few holidays that isn’t both a Wall Street and a federal holiday. U.S. exchanges on Friday will be closed in observance of Good Friday, and those in Europe will also be closed for Easter Monday. The action on Wall Street is also likely to be more subdued with Passover starting Wednesday evening and ending the evening of April 16.

 

The BOTTOM LINE: Share pricing is so hard to fathom with volatility being the base line of “our” universe, there is a LACK of CONFIDENCE and CONVICTION in the RegMed cell and gene therapy sector’s journey through the Q2/2020 cycle – so far!

I am staying with “Remain Cautious … where is all the “good” data – is it even being formed as to when the new of the newest normal appear or is it still an apparition.

  • Sector stocks have NOT fully priced-in a potential of an economic breakdown as the coronavirus pandemic shut down the U.S. economy;
  • The most hurtful statement I’ve heard is markets will NOT be able to recover the losses in equities until sometime next year.

 

Tuesday night’s title: “markets lose their steam minutes from the close as the sector gets ahead of reality. Infection and death rates have increased as the multitudes self-isolate; optimism is a disheartened value-based factor”

  • The NASDAQ closed DOWN -25.98 points (-0.33%);
  • The IBB closed down -1.94% and XBI also closed down -1.83%;
  • The CBOE Volatility Index (VVIX: INDEX) was up +1.35 points or +2.98% at 46.59;
  • Tuesday opened positive at 28/5 and 2 flats (CLBS & AGTC), stayed positive at the mid-day at 27/8 and closed negative at 17/18 of the 35 covered companies;
  • 8 out of the 17-upside had higher than the 3-month average volume;
  • 7 out of the 18-downside had higher than the 3-month average volume;

 

Q2:

  • April registered 3 negative and 2 positive closes

Q1:

  • March registered 11 negative, 1 neutral and 10 positive closes
  • February registered 9 negative, 9 positive closes, 3 vacation days and 1 holiday.
  • January registered 9 negative, 10 positive closes and 2 holidays.

 

Companies in my headlights – It’s your decision; I provide an idea and context:

Skim if you can trim, buy if it will fly and sell if compelled!

 

Opinions expressed are those of the author and are subject to change, and not intended to be a forecast of future events, a guarantee of future results, nor investment advice.

Whether information or intelligence is good, bad or somewhere in between; I put into context what is relevant and useful for investors.  All investments are subject to risks. Investors should consider investment objectives.

Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions in securities referred to in this publication.